The energy consultancy Cornwall Insight warned that UK consumers will face unprecedented energy-cost increases starting in October. A typical household bill is expected to reach 34,000 by the beginning of next year.
Cornwall Insight raised its forecast for the average bill from October by £223 to £3,582 a year and by more than £650 to £4,266 from January 2023.
@CornwallInsight prediction #Energybills forecast to top £4,200 in fresh blow to #UK households. Forecasts for the October cap have also seen a rise, going up by over £200, with predictions for an average bill now sitting at £3,582. It may be time to reconsider the price cap https://t.co/hAibJ0TnwK
— Share_Talk ™ (@Share_Talk) August 9, 2022
It was due to higher wholesale prices as well as a change of methodology by regulator Ofgem to calculate the energy gap. This is facing backlash from its decision to implement quarterly price cap reviews.
The consultancy predicted that energy bills from Centrica’s British Gas, and other energy companies, could rise to an alarming £4,427 by the end of the second quarter of 2023. However, they will decline in the second half of next year.
Cornwall Insight stated that “These forecasts for the quarter January-March 2023 underline the importance of support for households who will have difficulty paying their energy bills this winter.”
“It is crucial that the government uses our predictions to encourage a review of the consumer support package. The £400 did not make an impact on our previous forecasts, but it isn’t enough now.
We have released new price cap figures following a wholesale price surge and Ofgem revising their cap methodology.
We are predicting a typical household will pay the equivalent of:
– £3,582 p/a from Oct
– £4,266 p/a from Jan
More on our forecasts below:https://t.co/0LpPYbWXj8
— Cornwall Insight (@CornwallInsight) August 9, 2022
It indicated that it was time for a complete replacement of the price cap.
“Although it may not be controlling consumer prices and is causing damage to suppliers’ business models, it should be questioned if it is fit to purpose, especially in these unprecedented energy market conditions.”
Only half of the cost-of-living assistance covers the rise in bills for poor households
According to a new analysis, the amount of government support to address the cost-of-living crisis is less than half of the increase in prices that households will face this year.
According to the Joseph Rowntree Foundation, the cost of living for the poorest families will increase by £2,500 compared to £1,200.
As it warned that rising prices will lead to “unnecessary suffering” for millions, the charity called on the Government to double its support for the poorest families. Katie Schmuecker at the Joseph Rowntree Foundation said
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